The most popular current option for refinancing is to take cash out of the home’s equity. When the value of the property has increased and/or the rates have dropped, homeowners can take the difference between the new loan and the home’s appraised value as “cash out.” The benefits vary from borrower to borrower, but it’s often an excellent way to consolidate debt or re-invest into the home by remodeling or improving its value. The proceeds are tax-free which adds to the appeal of this option.
Need to remodel your house or just need some cash for a rainy day? With soaring values, your home probably has significant equity. Convert that equity into a tangible item.
You can borrow large amounts of money and qualify easier because the loan is secured by your home. You get options to lower rates than credit cards and may qualify for tax deduction on the interest payments.
Features of Home Equity Loans
- Potential tax advantages
- Consistent repayment for the life of the loan
- Ability to consolidation other higher-rate debts
- Flexibility to pay for large planned or even unexpected expenses
- Low competitive rates and fees
- Easy access to funds
The payments will depend on your financial situation and the current market interest rates.